May 01, 2019

The Montana Legislature passed HB 658, a continuation of Montana’s Medicaid expansion program, providing health care coverage for over 96,000 Montanans. The Legislature enacted Medicaid expansion in 2015, but included a termination date on the law for June 30, 2019. Action in this legislative session ensures the continuation of Montana’s program, but includes some notable changes.

1. Current Exemptions from 2015 Waiver

HB 658 maintains the current exemptions for requirements set out in the 2015 waiver. These exemptions apply to premium requirements and the taxpayer integrity fee, and exempted those enrollees from the TPA plan (though this is no longer applicable due to actions taken during the 2017 Legislative Session). These exemptions include American Indians, medically frail, and those with incomes below 50% of the federal poverty line, and are maintained and moved to MCA 53-6-1304.

2. Community Engagement (Work) Requirements

The biggest change to the law is the “community engagement” (or work reporting) requirement for some enrollees. Those enrolled aged 19 to 54 and who do not meet one of the below exemptions specific to the work requirements will need to show they are working 80 hours per month. The law leaves it to DPHHS to put in place reporting requirements (i.e., how frequently, in what form) and the process DPHHS will undergo for verifying reporting.

a) Allowable Activities

The law lists several categories of allowable activities that will count toward 80 hours a month. DPHHS will likely further define these activities by rule:

employment;

volunteering;

workforce training;

secondary, postsecondary, or vocational education;

substance abuse education or treatment; and

other activities as defined by DPHHS that further the health purposes of Medicaid.

b) Exemptions

The law exempts a significant portion of enrollees from these new community engagement (work) reporting requirements. The law allows (and encourages) DPHHS to use existing data sources to verify exemptions, alleviating (in many, but probably not all, cases) the need for enrollees to self-attest to an exemption. Data used should include wage/income data, enrollment data, insurance claims data, and data from other safety net programs. The community engagement exemptions include:

those with incomes that exceed an amount equal to the average of 80 hours per month multiplied by minimum wage (of annual wages of $8,160);

under supervision of corrections or county jail, including those on probation or parole;

experiencing chronic homelessness;

victim of domestic violence; or

living in a high-poverty area.

An enrollee is temporarily exempt from the requirements if facing hospitalization or serious illness, caring for someone who is hospitalized or facing a serious illness, or impacted by a catastrophic event that prevents compliance. The exemption would apply during the reporting period(s) while facing such hardship.

If a participant subject to the new community engagement requirements fails to meet or report activities or an exemption, DPHHS shall notify the participant of the requirements. At that point, the participant then has 180 days to come into compliance. If a participant fails to comply within the 180 days, DPHHS will suspend coverage for up to 180 days. However, DPHHS can reinstate coverage prior to the 180 days if: (i) the enrollee meets an exemption; or (ii) the enrollee meets the community engagement requirements for 30 days.

3. New Premium Requirements

For the narrow population of enrollees that are subject to premiums, HB 658 maintains the current requirement to pay premiums equal to two percent of enrollee’s modified adjusted gross income. However, the law then requires those individuals: (i) subject to premiums; (ii) who are enrolled for more than two years; and (iii) subject to the community engagement requirements, to pay higher premiums (increased by 0.5 percent each year after the second year). Those exempt from the “community engagement” requirements would be exempt from increased premiums. The 2019 law eliminates copays.

4. Taxpayer Integrity Fee (TIF)

The 2019 law maintains the fee imposed by Department of Revenue (DOR) for enrollees owning a certain amount of assets but makes significant changes to how it is calculated. First, the fee is now calculated using equity in particular assets. (Previously, the threshold values were calculated using the value of the asset, rather than equity in the asset.) Second, the fee will now apply if an enrollee meets any of the three asset calculations. (Previously, an enrollee had to have assets that exceeded all three prongs.)

The fee will apply if an enrollee owns:

Equity in real property or improvements in real property that exceed $255,000; or

Equity in more than one vehicle with total appreciable value that exceeds $25,000; or

Ownership in agricultural land with taxable value that exceeds $1,500.

If a participant owns the above type of assets that exceed that asset limit, the enrollee is assessed a fee (by DOR) equal to $100 a month, plus $4 a month for each of the following:

Each $1,000 in equity value in land above the $255,000 limit;

Each $1,000 in equity value in vehicles above the $25,000 limit; and

Each $100 of taxable value in ag land above the $1,500 limit.

5. Timeline

The current HELP Act (as passed in 2015) will stay in effect until December 31, 2019.

The law requires DPHHS to submit a new waiver to CMS by August 30, 2019. DPHHS will solicit public comment (law requires 60-day period) and submit the draft waiver to the Medicaid advisory council and the Children, Families, Health, and Human Services legislative interim committee.

CMS will then consider the waiver submitted and must provide a 30-day public comment period. Exactly how long CMS will take to approve the waiver is unclear (it will take at least 45 days from submission, but likely to take longer). As a reminder, CMS (under a different administration) approved Montana’s original waiver on November 2, 2015.

The new provisions within HB 658 (including community engagement requirement and increased premiums) go into effect on January 1, 2020. Many of these provisions will likely require DPHHS rulemaking. Enrollees subject to the community engagement requirements must come into compliance within 180 days of implementation.